Roemer's law states that "a hospital bed built is a bed filled." In essence, Roemer's Law argues that hospitals and physicians do what they can to take advantage of their available resources and if demand for services are less than capacity, hospitals and physicians will figure ways to induce more demand. The motivation here is to make as much money as capacity allows.

For example, public and private insurers often deny authorization or payment for what’s called “low-value” services, defined as care that offers little to no clinical benefit, wastes resources and potentially harms patients (e.g., unnecessary antibiotics, repeated scans). Hospitals and physicians know this, so what do they do? Increase types of care that are more likely to be compensated, including care (eg, tests, procedures, operations) that may still be of questionable value for particular patients though not labeled low-value in general (and therefore more likely to be preauthorized or approved upon claims review). This practice of care substitution essentially maintains volume of care overall. Bottom line: hospitals and physicians want to make more money, not less. If cost-saving measures cut off one flow of cash, they’ll find another.

We still need to slash low-value care, because it eats up around one-third of healthcare spending in the U.S. each year, and U.S. healthcare spending is simply unsustainable. To elaborate:

“The United States spends more, both per capita and as a percent of GDP, on health care than any other country, yet fails to achieve commensurate health outcomes.  One reason for this discrepancy between health spending and outcomes is the significant amount – upwards of $340 billion per year – that the U.S. spends on low-value care… With a pressing need to reduce costs and improve quality within the U.S. health care system, reducing the use of low-value services should be a priority for providers, purchasers, and patients.”  - Reducing Utilization of Low-Value Care University of Michigan Center for Value Based Insurance Design

But tackling low-value care and other sources of unnecessary spending (eg, fraud) isn’t enough to get overall healthcare spending down. We need to change the incentives that maintain the current system. More on that in the next post.

Sources:

Buist DS et al, Primary Care Clinicians' Perspectives on Reducing Low-Value Care in an Integrated Delivery System. Perm J. 2016 Winter;20(1):41-6. doi: 10.7812/TPP/15-086

Kroon D et al, Why Reducing Low-Value Care Fails to Bend the Cost Curve, and Why We Should Do it Anyway. International Journal of Health Policy Management. 2023;12:7803. doi: 10.34172/ijhpm.2023.7803

Reducing Utilization of Low-Value Care University of Michigan Center for Value Based Insurance Design Accessed February 12, 2026

Roemer’s Law / .Wikipedia Accessed February 12, 2026

Why is US health care still the most expensive in the world after decades of cost-cutting initiatives? Patrick Aguilar / The Conversation  February 11, 2026